Vedanta hikes open offer price for Indian unit to Rs 235 per share

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New Delhi: Anil Agarwal-led Vedanta Resources Plc on Tuesday raised the open offer price for buying shares in its flagship Indian firm to Rs 235 per share, nearly 4 per cent higher than the current trading price.

In January, Vedanta Resources had offered to buy up to 10 per cent in Vedanta Ltd at Rs 160 apiece. It on Tuesday raised the offer price to Rs 235 per share and offer size to 651 million shares representing 17.5 per cent stake in Vedanta Ltd, the company said in a filing to the Singapore stock exchange.

If successful, it will cost Rs 15,298.5 crore.

The price announced is at a nearly 4 per cent premium to Tuesday’s closing of Rs 226.55 on the BSE. The offer price of Rs 235/share is at around 60 per cent, 45 per cent and 30 per cent premium over the 6 month, 90 day and 60 day volume weighted average price (VWAP), respectively.

The previous offer price of Rs 160 apiece for 37.17 crore shares was less than Vedanta’s trading price. Vedanta Resources’ shareholding in Vedanta Ltd will increase from the current 55.1 per cent to 72.6 per cent post the transaction.

The open offer starts on March 23 and closes on April 7, it said. In October last year, Vedanta Resources had failed to garner the required number of shares to delist its Indian arm at the offer price of Rs 87.5 apiece.

In December, the promoters increased their stake from 50.14 per cent to 55.11 per cent through block deals totalling Rs 2,959 crore.

“Vedanta Resources Ltd, along with persons acting in concert with it (PACs), had issued a public announcement on January 9, 2021, for a voluntary open offer for the acquisition of up to 37.17 crore equity shares, representing 10 per cent of the fully diluted voting shares capital of Vedanta Ltd at a price of Rs 160 per equity share.

“The acquirer and PACs have decided to increase the number of equity shares to be acquired in the open offer to up to 61.5 crore shares, representing 17.5 per cent of fully diluted voting share capital, and increase the offer price to Rs 235 per share including interest of Rs 1.29 per equity share,” it said.

At the time of raising its stake in December 2020, Vedanta Resources had said the move was aimed at simplifying the group structure.

“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and improve a range of important credit metrics,” it had said.

The simplification process — which has been underway for several years — has involved mergers of group companies and may involve other share acquisitions in accordance with applicable law, the company had said.

During the delisting offer in October, promoters were able to get only 125.47 crore confirmed bids against the required 134.12 crore shares.

Vedanta had tied up USD 3.15 billion in loans to finance the buying of shares but returned the money to lenders no sooner had the delisting bid failed.

As of December 31, LIC held 5.58 per cent of Vedanta Ltd while ICICI Prudential Mutual Fund and HDFC Mutual Fund owned 3.14 per cent and 1.28 per cent stake, respectively.